Michael Burry has purchased new out-of-the-money put options on Palantir, signaling a fresh bearish bet against the company [2, 4].
The move by the Scion Asset Management founder suggests a lack of confidence in the current valuation of AI-linked stocks. Because Burry gained fame for predicting the 2008 housing market crash, his portfolio shifts often trigger scrutiny among retail and institutional investors.
Burry placed these trades in June 2024 [2, 4]. By purchasing put options, he is positioned to profit if the share price of the NASDAQ-listed company falls. This action effectively shorts the stock again, renewing a previous pessimistic stance on the company's market value [2, 3, 4].
Reports said Burry believes the valuation of Palantir is over-inflated [3, 4]. His outlook is severe, as he expects the price to fall and potentially drop below $1 [4]. This perspective contrasts with the broader AI rally that has continued to support many technology stocks in the U.S. equity markets [2].
Market reactions to the move remain divided. Some analysts said that Burry's put buys should not deter retail investors from holding the stock [5]. Others said Burry views the stock as essentially worthless, which drives his decision to refresh the trade [4].
Burry has previously taken similar positions against other high-profile AI companies, including Nvidia [3]. These trades reflect a broader strategy of betting against the sustainability of current artificial intelligence valuations across the tech sector [3].
“Michael Burry has purchased new out-of-the-money put options on Palantir”
This trade indicates a high-conviction bet that the AI bubble is nearing a correction, specifically regarding software firms with high price-to-earnings multiples. While Palantir has benefited from the surge in AI adoption, Burry's position suggests that the fundamental value of the company does not support its current market price, posing a risk to investors who rely on momentum-based growth.
